Contradicting information, isn't it great.
Speaking of contradicting information in this oil scarcity crisis….According to the associated press, oil prices dropped because oil inventories are increasing. Crude oil fell over 4%, and although prices are still higher than they were a year ago, They are still $40 less than the price paid in 1980.
This is good news right? Well, not exactly. The same page allows you to link to another article discussing the continual increase in fuel prices around the world. Analysts predict that prices will continue to rise and that there is little we can do about it.
Of course then you have OPEC saying it has lost control of the oil market and there is not much it can do to lower the prices. With this argument comes a statement from Senator Ron Wyden from Wyoming who states “This is their claim, but the fact of the matter is that nobody knows what their capacity is.” Could we have a problem of asymmetrical information in the oil market? I think the answer is yes.
However, this ‘oil scarcity’ isn’t always a bad thing. The rocketing fuel prices have seemed to create an incentive for hybrid cars in the market. Companies like Toyota are finding new ways to create hybrid cars that do not consume as much fuel, and the market is looking rather good for them. This year Toyota plans on releasing 62,000 of its hybrid SUV. If we don’t have gas to drive our cars, I guess we’ll just develop better ones. We’ve got brains, we just need to use them.
posted by Sarah @ 4:40 PM
4 Comments:
I found your statement that "oil scarcity isn't always a bad thing" to be rather intriguing. At first glance one would think the statement is ludicrous and unfounded but a step back and a more analytical look proves otherwise. Just like you mentioned with hybrid cars "oil scarcity" sets the stage for all kinds of other inovation. I think hybrid cars and other kinds of auto inovation is the best way to go. Instead of attempting in vain to motivate people to drive less which is not likely to happen hybrid cars and other coming technologies allow people to drive their desired amount without consuming expensive fuel.
As scarcity increases new technoligies and markets will be created and grow as well which in many cases benefit society much more than scarcity hurts it.
i agree that scarcity isn't such a bad thing. It might even be a good thing. We can sit around and let new technologies come around to save us from these out-dated technologies. These new hybrid cars will save us from spending our luch money on gas. In fifty years we can expect something new to save us from them. Meanwhile, our bikes collect dust and our legs forget that they can do more than just push on the gas and brakes.
My incentive to drive is that it saves me time, but how much is that worth to me? So far it's worth $2.10 a gallon. Probably even three dollars a gallon.
Very interesting article. I wonder if gas prices continue to rise beause of some governmental interfeance on our part. I bet China is responsible for some if it as well, the more industrialized they become the more oil they demand. Thus if oil is truely a scarce commidity (in light of the lecture concering scarcity and how we as a population have avoided true scarcity through tecnology inovation etc) it will be more expensive at the margin with more people trying to get their hands on it.
The issue with the hybryd cars is that they are heavily subsidized by tax dollars. The last thing i read about it was that it was still to expensive to produce these cars and sell them at a price that the public would pay. I know, for a good example, that Honda was producing its Civic hybryd and selling it at a loss to try and get it out on the market. They were reciving grants to cover the costs they lost in selling the cars. I wonder if the true price, the price the market would set for these cars, were attached to the cars if people would buy any? I guess propbaly not.
In response to Jared's comment, yes, most people probably would not pay the real price. However, anews story I found said there's a 1 yr wait for a Toyota Prius in Omaha NE. So maybe someday an acceptable, real price will be found somewhere between supply and demand. Subsidies aren't such a bad thing, if they help get things on track. The technology and the environment are worth the investment.
Hybrid owners also get tax credits, but that's getting phased out by the end of next year.
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